Snowy 2.0 Tunnel Breakthrough Achieved as Project Faces Rising Costs and Delays

Tunnelling machines have pierced through a key stretch of rock deep under the Snowy Mountains in NSW Kosciuszko National Park. 0 power station itself. 0 was announced in 2017 by former prime minister Malcolm Turnbull.

5 billion in today's dollars after inflation adjustment. The project will connect two existing reservoirs at Tantangara and Talbingo via a 27-kilometre underground tunnel system. It will act like a giant battery, using excess wind and solar energy to pump water from Talbingo to Tantangara.

When demand rises, water will be released back down the hill to generate electricity. 2 gigawatts of power at full capacity, which Snowy Hydro claims is enough to power 3 million homes for a week. The project is seven years behind schedule.

Its initial budget was $2 billion. Snowy Hydro's most recent costings place the price at $12 billion. Based on that figure, the project has blown out by around $3 million a day. Snowy Hydro has admitted the final price tag will be much higher.

5 billion. In 2018, the federal government bought the New South Wales and Victorian governments' stakes in Snowy Hydro Limited for $6 billion. Early works began in 2019 when the project was entirely Commonwealth-owned.

1 billion. They formed the Future Generation Joint Venture for construction. The Black Summer bushfires and COVID-19 caused unexpected delays less than a year into construction.

From 2021, three tunnel boring machines were deployed. The first two, Lady Eileen Hudson and Kirsten, completed the main access and emergency escape and ventilation tunnels with few issues. The third machine, Florence, became stuck in February 2023 after hitting soft ground 150 metres into a 15-kilometre tunnel linking Tantangara Reservoir to Lobs Hole.

The ground above collapsed, creating a sinkhole. Florence was stuck for roughly 11 months. Chief executive and managing director of Snowy Hydro Paul Broad resigned in June 2022. At the end of 2022, Clough collapsed and its Australian business was bought by Salini Impregilo, which rebranded to WeBuild.

In August 2023, the project's budget was reset to $12 billion and the completion date was extended to 2028. The Australian National Audit Office gave a glowing review of Snowy Hydro's governance in 2022, stating it was "effective" with no recommendations. At that time, the project was on track to be finished by 2026–27.

Investigations by ABC's Four Corners revealed that the setbacks caused by Florence alone may have cost the project $2 billion. A toxic gas leak occurred in July 2023. A tunnel collapse occurred in 2024.

A ventilation fan imploded in February 2025. Workers went on strike over pay in May 2025. In July 2025, SafeWork NSW closed a concrete testing lab due to silica exposure concerns. In October 2025, Snowy Hydro confirmed it would require additional funding, citing rising supply chain costs, productivity challenges, and expensive new tunnelling equipment.

Snowy Hydro chief executive Dennis Barnes was paid a $323,000 bonus as part of more than $1 million in executive bonuses. 2 million in bonuses despite missing financial targets. The bonuses were awarded for meeting targets on customer satisfaction, safety, and work culture.

In May, Barnes acknowledged the project's difficulties but stood by its importance. 0's scale and uniqueness have compounded the increase," he said. " Snowy Hydro confirmed two safety incidents: one in January 2025 where a truck was close to falling off a cliff, and another in January 2026 where a worker was hit by an excavator boom.

The contractors involved made changes in consultation with SafeWork NSW. 0 in 2026–27, double the amount planned in the previous budget. A fresh review of the project's costs is underway, with results expected to be independently verified and released in the coming months.

0 is being managed to deliver value for money. 0's power station is expected to start generating power in late 2027 and is slated for completion in December 2028.